Winklevii: Bitcoin ETF a Cure for ‘Scary Proposition’ of Buying It Yourself

By Brendan Conway

Tyler and Cameron Winklevoss made the pitch for a Bitcoin ETF at the Value Investing Congress in New York this morning — the crux of which came down to taking some of the fright out of a frightening idea. Even the twins call owning Bitcoin a “scary proposition.”

If you’re new to this story, back in July, the duo better known for contesting Facebook’s (FB) origins filed regulatory paperwork for the Winklevoss Bitcoin Trust, an ETF investing in the digital currency that caused more than a few jaws to drop in the fund industry. The plan from the Winklevoss’ Math-Based Asset Services LLC was immediately panned, including by the man known as “the Godfather of ETFs.” The digital currency was viewed as too illiquid, too volatile, and facing too much regulatory uncertainty to build an easily tradeable ETF.

“There’s a lot of pain points and friction in Bitcoin right now,” Cameron told the audience. (I believe it was Cameron and not Tyler… Will update if that’s incorrect.) “Buying Bitcoin today, it’s sort of a scary proposition. You store it on a USB stick, [you have to be somewhat] technically savvy … [If you're transacting in] large amounts of money, there’s no real insurance aspect.

As he continued: “An ETF can help solve the purchasing friction in terms of security. It can offload that to the ETF… Storing Bitcoin takes expertise [and] accessibility. …. It’s similar to how [people] can’t buy gold bars [so they instead buy an ETF” — a comparison to funds like SPDR Gold Trust (GLD).

As the argument was summed up: “An ETF can potentially make it successful for mainstream investors.”

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Chris Dieterich has covered the U.S. stock market for The Wall Street Journal and Dow Jones Newswires. He is a graduate of Regis University and the Missouri School of Journalism.